almost 4 years ago • 2 mins
Canadian ecommerce platform Shopifyreported first-quarter earnings on Wednesday – and its swelling sales may say something about post-pandemic shopping 🛍
Shopify software powers well over a million retailers’ online storefronts, providing a consumer-facing alternative to Amazon for small traders and big businesses alike. And an attractive one at that: revenue grew 47% compared to a year earlier, although the company swung back to a small loss after notching its first-ever public profit back in February.
Intriguingly, the number of new Shopify buyers and sellers in the latter, coronavirus-hit half of the quarter grew 8% and 62% respectively compared to the first. And even as physical stores were forced to close, the firm’s data shows its retail customers were quick to adapt, replacing many lost instore sales with online ones and rapidly rolling out new delivery options. By happy coincidence, Shopify launched its own shipping fulfilment service late last year… 😉
Shopify’s earnings landed in a week where fashionista J Crew became the first in a potentially long list of big US retailers to file for bankruptcy – with the coronavirus also nixing the sale of Victoria’s Secret. Investment bank Goldman Sachs, meanwhile, warned on Tuesday that even when physical stores are allowed to reopen, high costs and the prospect of fewer customers will likely slow the pace at which they actually do so – further boosting online shopping.
The growth of ecommerce is nothing new, even if its coronavirus-fueled acceleration is: US e-sales grew 12% in April compared to a year before, up from 9% in March. But while Shopify is still nowhere near as big as Amazon, its growth is tied to another hot trend: social media marketing. Joining Facebook’s Libra payments network could eventually prove to be a savvy move.
Some worry about Shopify’s focus on small businesses, who may be among those hardest hit by the current crisis, as well as the impact of a longer-term downturn in consumer spending. But the majority of investors don’t seem to mind. Shopify’s 6% share price rise on Wednesday took it to a new record high – and it’s now the second most valuable public company in Canada 😮
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